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Microsoft’s Earnings Beat On Top And Bottom Lines

Microsoft (MSFT) has issued fourth-quarter financial results that beat expectations on both the top and bottom lines, fueled largely by growth in the company’s cloud-computing segment.

The Seattle-based technology giant reported earnings per share (EPS) of $2.93 U.S. versus $2.78 U.S. that had been forecast among analysts who cover the company.

Revenue in the October through December quarter amounted to $62.02 billion U.S. compared to $61.12 billion U.S. that was expected on Wall Street. The company’s sales increased 17.6% year-over-year in the quarter.

The results were driven by the company’s cloud-computing segment, with Intelligent Cloud posting $25.88 billion U.S. in revenue, up 20% from a year ago,

Within the cloud segment, revenue from Azure and other cloud services grew 30%. Analysts had expected 27.7% growth.

Microsoft now has 53,000 Azure artificial intelligence (A.I.) customers, and one-third of them are new to Azure in the past year, said the company.

The number of commitments to spend more than $1 billion U.S. on Azure cloud services in the year ahead increased during the quarter, Microsoft said.

Revenue from Microsoft’s Productivity and Business Processes unit that includes Office software products and LinkedIn totaled $19.25 billion U.S. in revenue, up 13% from a year ago.

The Personal Computing segment contributed $16.89 billion U.S. in revenue, up 19% year-over-year. That segment includes Windows, Surface, Bing, and the Xbox video game unit.

During the final quarter of last year, Microsoft closed its $68 billion U.S. acquisition of video game publisher Activision Blizzard, its largest deal ever.

The company also announced custom cloud microchips and started selling a $30 U.S. monthly Copilot A.I. add-on to Microsoft 365 productivity software bundles.

In terms of forward guidance, Microsoft said it expects revenue of $60 billion U.S. to $61 billion U.S. for the current first quarter of 2024. Analysts expected Q1 revenue of $60.93 billion U.S.

Microsoft’s stock has gained 69% over the last 12 months and currently trades at $408.59 U.S. per share.

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